DAVID DEVASAHAYAM,CHENNAI vs. ITO, CORPORATE WARD-5(3), CHENNAI

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ITA 3150/CHNY/2026Status: DisposedITAT Chennai04 August 2026AY 2015-164 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the ex parte orders and restored the matter to the CIT(A) for fresh adjudication, granting the assessee a final opportunity to present evidence. This was subject to a cost deposit.

What were the facts?

The assessee claimed a deduction for advisory charges. The Assessing Officer disallowed this claim and initiated reassessment proceedings. The CIT(A) dismissed the appeal ex parte.

What were the issues?

Whether the ex parte assessment and appellate orders were justified and if the assessee should be granted a final opportunity to present evidence for the disallowed advisory charges.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 142(1),Section 143(2),Section 48,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: GAGAN GOYAL & SHRI MANU KUMAR GIRI

Hearing: 22.07.2026

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi, [hereinafter referred to as “the Ld.CIT(A)”], dated 19.03.2026 confirming the assessment framed u/s. 147 of the Income Tax Act, 1961 for Assessment Year 2015-16.

ITA No. 3150/Chny/2026 (AY 2015-16) David Devasahayam Vs ITO CW 5(3) :: 2 :: 2. The assessee filed the return of income on 28.08.2015 declaring a total income of Rs.38,48,75,770/-. Based on information that the assessee had claimed deduction of Rs.1.28 crore towards advisory charges while computing long-term capital gains on sale of shares, reassessment proceedings were initiated. Notices under sections 148, 142(1), and 143(2) were issued. The assessee explained that the payment was made to Price Waterhouse Coopers Pvt. Ltd. for advisory services pursuant to an agreement dated 06.02.2014. However, the Assessing Officer disallowed the claim, holding that the expenditure was not deductible under section 48, and completed the assessment under section 147 read with section 144B on 02.05.2023, assessing the total income at Rs.39,76,75,770/-. The Assessing Officer also failed to grant credit for advance tax, self- assessment tax, and tax paid on regular assessment.

3.

The CIT(A) dismissed the appeal ex parte, observing that despite adequate opportunities, the assessee failed to furnish submissions or supporting evidence. The disallowance of Rs.1.28 crore towards advisory charges was accordingly confirmed.

4.

Before us, the learned Authorised Representative submitted that both the assessment and appellate orders were passed ex parte and that the assessee could not place the relevant material before the lower authorities. It was therefore requested that one final opportunity be granted to substantiate the claim.

ITA No. 3150/Chny/2026 (AY 2015-16) David Devasahayam Vs ITO CW 5(3) :: 3 :: 5. The learned Departmental Representative supported the orders of the lower authorities, contending that sufficient opportunities had already been afforded.

6.

We have considered the rival submissions and perused the material on record. It is undisputed that both the assessment and the first appellate order were passed ex parte. In the interest of substantial justice, we deem it appropriate to provide the assessee one final opportunity to place the necessary evidence before the CIT(A). Accordingly, without expressing any opinion on the merits, we set aside the impugned order and restore the matter to the file of the CIT(A) for fresh adjudication in accordance with law. This restoration, however, shall be subject to the condition that the assessee shall deposit a cost of Rs.5,000/- (Rupees Five Thousand only) with the Tamil Nadu State Legal Services Authority, High Court of Madras, within 30 days from the date of receipt of this order. The assessee shall produce proof of such payment before the Ld. CIT(A) at the time of the fresh proceedings. The Ld. CIT(A) shall thereafter afford adequate and effective opportunity of hearing to the assessee and decide the appeal afresh in accordance with law.. The assessee is also directed to extend full cooperation and diligently participate in the appellate proceedings. In the event of any failure or non-compliance on the part of the assessee, the Ld. CIT(A) shall be at liberty to proceed in accordance with law. The cost imposed herein shall be deposited within the stipulated period without seeking any extension.

ITA No. 3150/Chny/2026 (AY 2015-16) David Devasahayam Vs ITO CW 5(3) :: 4 :: 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the 04th day of August, 2026 in Chennai.

Sd/- Sd/- (गगन गोयल) (मनु कुमार िग#र) (Gagan Goyal) (MANU KUMAR GIRI) लेखा सद$य/ACCOUNTANT MEMBER %या�यक सद$य/JUDICIAL MEMBER चे%नई/Chennai, 'दनांक/Dated: 04th August, 2026. SNDP, Sr. PS

आदेश क� ��त(ल)प अ*े)षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF SANDE Digitally signed by SANDEEP EP KUMAR Date: 2026.08.05 KUMAR 16:58:36 +05'30'

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